Canada Budget 2022: What's its billion-dollar plan to boost innovation?

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Canada Budget 2022: What's its billion-dollar plan to boost innovation?

Canada Budget 2022: What's its billion-dollar plan to boost innovation?
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Highlights

  • Finance Minister Chrystia Freeland, while tabling Budget 2022 on Thursday, April 7, chalked out detailed plans to boost productivity and innovation.
  • Ms Freeland noted while that Canada is among the most educated countries, it is behind in terms of “economic productivity”.
  • In an effort to tackle economic productivity issues, this budget introduced an Innovation and Investment Agency.

Finance Minister Chrystia Freeland, while tabling Budget 2022 on Thursday, April 7, chalked out detailed plans to boost productivity and innovation, which she described as the “Achilles heels” of the economy.

Ms Freeland noted while that Canada is among the most educated countries, with cities outshining the US’ Silicon Valley in offering high-paying tech jobs, it is behind in terms of “economic productivity”.

To tackle that, Budget 2022 aims to pivot the focus from emergency COVID expenditure to investments helping Canada in the following ways:

  • Apart from childcare, housing, climate change, etc., Freeland pitched for investment in business innovation, research and innovation, and supply chains to expand Canada’s economic capacity and productivity for long-term growth.
  • She also talked about responsible government spending and intentions to save and allocate funds to other post-pandemic priorities to combat inflationary pressures and support long-term growth and prosperity at the same time.

Budget 2022: Innovation and Investment Agency

In an effort to tackle economic productivity issues, this budget introduced an Innovation and Investment Agency that will focus on international best practices by providing companies “incentives and tools” to invent and produce “more with less”.

The government proposed a spending budget of C$ 1 billion over five years, beginning from 2022-23, to initialize the agency’s operations.

Also read: Canada Budget 2022: What are Freeland's 'feminist' plans for women?

Canada Growth Fund

Budget 2022 also launched the Canada Growth Fund to collaborate with the public and private sectors, and across industries to enhance living standards for Canadians.

Today, yearly investment in the green transition is somewhere between C$ 15 billion to C$ 25 billion, whereas Canada will require an investment of C$ 125 billion and C$ 140 billion every year to achieve the target of a net-zero economy by 2050, Ms Freeland said.

The budget document says that the Canada Growth Fund, as a public investment vehicle, will enable the private sector’s resources to help the federal government meet important national economic policy goals.

To initiate, the fund is set to be provided with C$ 15 billion over a five-year span.

Canada Budget 2022: What's its billion-dollar plan to boost innovation?

Strategic Innovation Fund

Budget 2022 also proposed to fund C$ 1 billion over the course of six years, beginning from 2024-25, to Innovation, Science and Economic Development Canada for the Strategic Innovation Fund.

This fund aims to provide support to critical mineral projects focusing on manufacturing, processing, recycling and supply chains.

In addition, the Canadian government will also explore potentials opportunities to help the solar panel industry grow under its critical mineral investments envelope.

Also read: Canada Budget 2022: What are Freeland’s plans for cost of living?

What’s more for innovation and productivity in Budget 2022?

The budget also aims at strengthening Canada’s semiconductor industry by providing an additional C$ 45 million in four years, beginning from 2022-23, to Innovation, Science and Economic Development Canada.

It also proposed to fund C$30 million over four years, beginning 2022-23, to enhance CAN Health Network and increase its national footprint, including Indigenous communities.

Budget 2022 also included funding of C$96.6 million over five years, beginning from 2022-23, and C$22.9 million ongoing for its intellectual property regime.

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